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Public sector outsourcing

Author

Listed:
  • Panu Poutvaara

    (University of Munich, Ifo Institute, and IZA, Germany)

  • Henrik Jordahl

    (Örebro University and IFN, Sweden, and IZA, Germany)

Abstract

The decision to outsource public provision of services is multifaceted and context dependent. Doing so tends to lower labor intensity and increase its efficiency. Costs are usually lower, but quality problems can affect services like health care, though consumer choice has stimulated innovation and quality in both education and health care. Natural monopolies are less suitable for outsourcing, while network services (public transportation) may be outsourced through public tenders. Though some jobs may be lost in the short term, the long-term effects are generally positive for a wide variety of activities.

Suggested Citation

  • Panu Poutvaara & Henrik Jordahl, 2020. "Public sector outsourcing," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-65, November.
    • Handle: RePEc:iza:izawol:journl:2020:n:65
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Niklas Potrafke, 2019. "Does Public Sector Outsourcing Decrease Public Employment? Empirical Evidence from OECD Countries," CESifo Economic Studies, CESifo Group, vol. 65(4), pages 464-484.
    2. Alexandra – Irina BADEA & Nicolae Daniel MAI?A & Daniel ALEXANDRU & Nicoleta Loredana MEGA, 2022. "Integrated Multi - Level Approach to Public Service Performance Evaluation," REVISTA DE MANAGEMENT COMPARAT INTERNATIONAL/REVIEW OF INTERNATIONAL COMPARATIVE MANAGEMENT, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 23(2), pages 292-301, May.

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    More about this item

    Keywords

    public procurement; vouchers; outsourcing; health care; education;
    All these keywords.

    JEL classification:

    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J45 - Labor and Demographic Economics - - Particular Labor Markets - - - Public Sector Labor Markets

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